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Wednesday, March 27, 2013

Too Few Jobs for Population Growth

Almost three years ago in 2010 the New York Timeswrote
"It will take at least eight more years to create the 8 million
positions lost during the recession. And that does not even allow for
population growth."

As
of 2011, 18 million Americans had at some point received federally
funded extended unemployment benefits (up to 99 weeks, hence the term "the
99ers").

Now in 2013, according to the government's own statistics,
it still, might take another 8 years to get the reported U-3
unemployment rate down to pre-recession levels.

But in truth, I suspect that the real unemployment
rate will be a permanent economic condition --- at least until a great many
of my fellow Baby Boomers have become deceased...maybe by 2040.

According
to theCenter on Budget and Policy Priorities, 8.7 million jobs
were lost between the start of the recession in December of 2007 and early
in 2010 --- just several months before the reported U-3
unemployment rate had "officially" peaked at 10.2 percent.

That was when 15.7 million Americans were reported as unemployed
(Currently the Bureau of Labor Statistics reports the unemployment
rate as 7.7 percent with only 12 million unemployed).

The "net" new jobs created since that time, according to the Bureau
of Labor Statistics, is about 5.4 million --- which is just shy of
the 6 million young Americans who have graduated
from high school and college since then --- so job growthhas
not kept pace with natural population growth.

But we are on pace to create 8 million jobs in 8 years....but
still, what happened to the 8.7 million people who were originally laid off?

All the numbers show a very dismal picture. The reported U-6
unemployment rate is at 14.3 percent with 22.3 million Americans out of
work. Of those, 4.8 million have been unemployed for 6
months or longer (40.2% of those reported unemployed). But because the
government no longer tracks the unemployed after one year*, it doesn't
include millions of others who have been out of work.

* Since 1994 the long-term unemployed ("discouraged
workers" who have been jobless for more than one year) have been excluded from all government data.
Although the Bureau
of Labor Statistics did report
in October 2010 that 4.5 million Americans were unemployed for one
year or longer (and made up 31 percent of all those who were
reported unemployed).

Coincidentally, also in 2010, millions of Americans who were
laid off in late 2008 and early 2009 had exhausted all 99 weeks of
their unemployment benefits. But the Bureau
of Labor Statistics claims they don't use this data to calculate the unemployment
rate --- they use a household survey. At
their website they explain:

"Some people think that to get these figures on unemployment the Government uses the number of persons filing claims for unemployment insurance...but some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.
The number of unemployed persons in the United States and the national unemployment rate are produced from data collected in the Current Population Survey (CPS), a monthly survey of over 60,000 households."

If you have ever been contacted by the government for this
survey, please
contact me. I have as yet, over the past 4 years, found ONE
PERSON who has ever been contacted for this survey. I once calculated
that there were 8
million "99ers" who were not counted at all by the
U.S. government (they were swept under the rug).

Last
month 236,000 jobs were created nationally. That was much ballyhooed by
the administration, but at that rate it will take 8 more years to get back
to full employment.

In Las Vegas where I live, the
unemployment rate is still 10.2% -- which is what the national average
was back in October of 2009 --- when Las Vegas was once at 15.1%. Although,
casino owners such as Sheldon Aldelson have done phenomenally well since the
recession. (Current rates for other U.S. metropolitan areas can be found here.)

A
fellow 99er informs me: "In New Jersey, where the state's
unemployment rate is at 9.5%, we have 442,737 people unemployed, while only
2,600 jobs were created in the last month. At that rate it will take over 14
years to get everyone back to work."

But of all those jobs created in the private sector, more and more of
them are part-time jobs. Compared with December 2007, when the recession
officially began, there
are 5.8 million fewer Americans working full time. In that same period,
there has been an increase of 2.8 million working part time. Do the math.

If you include both part-time workers (who want full-time work) and
people who have gave up looking for jobs (but want to work), that puts the
U-6 unemployment rate at 14.3 percent.

But millions of unemployed Americans are no longer counted in the U-6
rate anymore. The government had once categorized them as "discourage
workers" and claimed they had given up looking for work; so after
one year, they are no longer even included in any of unemployment numbers,
not even in the U-6 rate.

As you can see from the chart below from ShadowStats.Com,
the actual number of people who are unemployed in the U.S. is much higher
than the "politically reported" U-3 rate...and it's actually
getting higher, which the government's "participation rate" only
confirms.

In 1983 the U.S. population was almost 234 million, now in 2013 it's over
315 million. The labor
force participation rate (the percent of the U.S. population that is
employed) is at a 30 year low. This excludes those that are not counted in
the participation rate --- such as those who are receiving Social Security
retirement or disability benefits, those in mental heath facilities or
interned in hospitals, and those who are incarcerated in our prison system.
And it also excludes "discouraged
workers".

And besides just population growth, job growth hasn't been keeping up
with corporate outsourcing either. And H-1B
VISAs and J-1
guestworker programs haven't helped either.

Our leaders (both Democrats and Republicans) have been cheering on the
new labor force in Asia because the corporations that donate money to them
are making record
profits with foreign labor.

Four years ago in the middle of the Great Recession,
representatives of many of the nation’s most powerful corporations
attended the 2009 Strategic Outsourcing Conference to talk about how
to send more American jobs overseas.

Conference organizers had polled the more than 70 senior executives who
had attended the conference about the behavior of their companies in
response to the recession. The majority said their
companies increased outsourcing.

And another question that was asked of the executives found that the top
reason for companies to outsource American jobs was to “reduce
operating costs” (and not because Americans lacked job skills).

Data from the U.S. Department of Commerceshowed
that “U.S. multinational corporations, the big brand-name companies that
employ a fifth of all American workers, cut their work forces in the U.S. by
2.9 million during the 2000s while increasing employment overseas by 2.4
million.”

Furthermore, a Wall
Street Journal analysis showed, “Thirty-five big U.S.-based
multinational companies added jobs much faster than other U.S. employers in
the past two years, but nearly three-fourths of those jobs were overseas.”

According
to a report on outsourcing by Working America, “Manufacturing
employment collapsed from a high of 19.5 million workers in June 1979 to
11.5 workers in December 2009, a drop of 8 million workers over 30
years. Just imagine what the unemployment rate (and the labor
participation rate) would be like today with those 8 millions jobs.

Manufacturing plants have also declined sharply in the last decade,
shrinking by more than 51,000 plants, or 12.5 percent, between 1998 and
2008. These stable, middle-class jobs have been the driving
force of the U.S. economy for decades and theses losses have done
considerable damage to communities across the country.

Large corporations such as Apple, which conducts all of its
manufacturing on foreign shores, and Nike,
which subcontracts all of its footwear production to independently owned and
operated foreign companies, lead the trend.

Private equity firms (such as Bain Capital and the like) have
increased the pressure to cut costs by any means necessary, leading to more
overseas outsourcing.

Labor costs are the main driver of corporations sending jobs overseas,
but foreign countries’ costs are increasing compared to the United States.

According
to a 2012 survey from Duke’s Fuqua School of Business, nearly
three-quarters of respondents indicated labor cost savings as one of
the three most important drivers leading to overseas outsourcing. The Duke
survey found that “only 4 percent of large companies had future plans for
relocating jobs back to the United States.”

No matter how you look at it, things are still very bad, especially for
the "50
and over" crowd (the Baby Boomers) who were laid off during the
recession and are still unemployed.

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Bud Meyers writes about the economy, politics, Social Security, corporate outsourcing, labor statistics, the REAL unemployment rate, taxes and tax evasion, government and corporate corruption, and the plight of the long-term unemployed.